How To Start an Ecommerce Business From Scratch

The ecommerce business industry is exploding. Brick and mortar stores that temporarily closed may never open again.

Shopping online used to be a convenience and a luxury, now – its a necessity. The ecommerce businesses that I work with can’t keep enough products stocked. Ecommerce has been growing for a while, and the numbers below don’t account for the recent events leading to an increase in ecommerce sales.

I’ve been in retail since 2005, I’ve opened physical stores, I’ve launched profitable websites and I’ve marketed small and large brands online. The amount of interest in ecommerce right now is unprecedented. A lot of folks want to know how to start an ecommerce business. If your goal is to make a quick buck – that’s all you’ll do, the goal should be a scalable, profitable business that lasts. You have to have a long term vision for building an asset that brings true value to the market.

Online retail is a booming business. But I’ve seen too many ecommerce businesses struggle to get traction. It’s taken me years to learn everything included in this page. Use the information here to set up your ecommerce store, protect yourself legally, get your finances in order, market and sell your product, and start building your store.

There’s nothing more rewarding starting a business from nothing and watching it grow. You build it up and no one can take it from you.

Building an ecommerce business takes more than choosing a brand name, writing product listings, and starting to sell products online. Even the best business ideas can flop if you aren’t driving enough traffic to your site. Prefer a step-by-step video course? Check out Ecommerce Business Blueprint.

Step 1: Research Ecommerce Business Models

Beginning your research is the first critical step. Don’t operate off of a hunch. Growing any online business is an investment. Treat it as such.

There isn’t a single business structure that works for everyone. Service-based business, software, digital product sales, and physical products are just the tip of the iceberg.

Before you can decide on what to sell online, you need to understand the different business models available.

If you want to turn a profit without touching your product or investing heavily at the start, dropshipping is a smart choice.

If you like the idea of having your own warehouse full of goodies, you’re investing more up front and working with a wholesaling or warehousing model. Have a business idea for the perfect product idea or a favorite product you wish you could sell under your brand? Look into white labeling and manufacturing.

And then there are subscriptions, where you carefully curate a set of products or a single product to be delivered at regular intervals to your customers.

The ecommerce business model that attracts me the most is a single product category that you supplement with affiliate marketing. You can control the content marketing and branding on a focused product and focus the rest of your energy on driving sales by monetizing traffic.

Ecommerce Business Models Must Read

Types Of Ecommerce: Ready to start your successful ecommerce business? Learn more about the process of selling products online and other types of online business models here.

Step 2: Start Ecommerce Niche Research

It pains me when people email me their ecommerce site and it’s filled with hundreds of products, dozens of categories, and no real focus.

Unless you have a massive budget, you can’t be the next Best Buy or Amazon. You have to niche down to run a profitable ecommerce store.

Choosing your niche is the most important step in opening your online business. Start this process by identifying successful companies already working in this space.

Make sure that the area is competitive – an absence of competition usually indicates that there’s no market, either.

Don’t pick an overly crowded niche, however, and skip anything dominated by major brands. If you’re having trouble with this, drill down further on what you want to do – the more specific you are, the less competition you are likely to face.

Niche-ing down also gives you the benefit of having a lot of “shoulder” niches, related to what you do, but not identical. You can work together with business owners in those niches to cross-promote, become (or acquire) an affiliate, and grow your customer base.

Pick a product category with a minimum of 1000 keywords and focus on a niche that does well in social media, where publishers in the area are affiliates on Amazon. If you can nab a few affiliate marketing opportunities, you won’t have to worry about shipping as much product, but you can still make a profit.

Step 3: Validate Target Market and Product Ideas

Now that you’ve identified a niche and business model, you might be tempted to start hunting for products to sell.

Don’t. Before you think about product ideas, think about personas. You can’t expect people to buy your product if you don’t know who you’re selling to.

Who are you? What does the store represent? Who are your ideal customers? You need to project a consistent brand image (a journey that starts with your brand name). An organic seed company that started selling conventional fertilizer wouldn’t last very long.

Once you’ve identified the image you want to project and the customer you are catering to, it’s time to come up with product ideas. I suggest starting with one – you’ll invest less at the start, and if you want to offer more you can test the waters with affiliate marketing.

In the example of an organic seed company, you could find popular organic products on Amazon and create content to send traffic to those affiliate products. If something catches fire, you can consider making your own brand of that product. If you’re not 100% sure what to sell, you can use affiliate marketing to validate your idea.

Before you invest in the product, though, evaluate it carefully. Even if you choose a dropshipping model, you want to test it carefully and get a feel for the product yourself so you can identify any potential problems and prepare customer service scripts to answer common questions.

Step 4: Register Your Ecommerce Business & Brand Name

If you want to start a successful business, you need a brand that connects with your persona. Identifying your persona makes building an ecommerce brand easier. You might avoid girlie colors and images if you are selling products to corporate businesswomen interested in living a sustainable life.

But before you set up your store and get into the nitty gritty of building a brand – there are some basic steps you’ll need to take.

Register Your Business.

Choose a business name and register your company. There are legal protections and tax benefits for incorporating, so don’t skip it.

Pick Your Store’s Name

The name of your site and the legal name of your business don’t need to be identical, but keeping them consistent has its benefits. Make sure whatever you choose fits your niche – you don’t want to pick a brand name at the last minute.

Get Your Business Licenses

If you’re not familiar with this process, the Small Business Association has plenty of resources to help you get started, including a mentor-protege network and courses on small business basics. Look actively for mentors – their advice can be priceless, even for little things like acquiring business licenses. One of the smartest decisions I ever made was finding someone who could show me the ropes.

Get Your Employer Identification Number

You’ll need an Employer Identification Number (EIN) to open a business bank account and file your business taxes next April, even if you don’t plan on having any employees. Your EIN is a bit like your business’ social security number: it’s a unique number that identifies your business and helps you file important paperwork.

Apply for Business Licenses and Permits

Operating an online store does not exclude you from needing certain business licenses and permits. Check with your city, county, and state to see what sorts of sales tax licenses or home business licenses you need, and get those approved before you start operating.

Find the Right Vendors

You’ll have a lot of competition selling products online, so it’s in your best interest to find the best quality and best prices for the products you sell or materials you use to create your products. Shop around until you find a vendor you want to do business with long-term – this includes your ecommerce software (your “shopping cart”). Think scalable from the start.

Logo Creation

Don’t fret over it too much, but do make sure that it is not in use by another company in your niche. Logo design doesn’t have to be terribly original, however (and really shouldn’t).

Get Visual

Consider the colors of your brand, the imagery you’ll use, and the typeface or fonts you’ll employ carefully. If you’ve got the budget, you might want to hire a marketing firm to create a design brief for your company. If not, you can create your own. Just keep it consistent and read marketing tips designed to help boost your brand.

Step 5: Finalize Your Ecommerce Business Plan

By now you should have a great idea of what your business will look like. You have your target market, your product niche and your brand name.

Now is a good time to step back and put your business plan on paper and determine your startup budget and monthly expenses.

The most important aspect of a business is the financial one. Figure out your break even point, both in unit sales and duration (in months). Any real business is an investment of resources. In fact that was one of the first things I learned in MBA school. A CEO’s role is to take resources and turn it into a return.

Yet, I am sad to see that many entrepreneurs don’t take the time to project their revenue and expenses.

The business planning phase is also when you want to iron out details like your staff, product sourcing, logistics and marketing budget.

Step 6: Create Your Online Store

Once you’ve legally registered your business and started thinking about design, you need to register your domain name and any redirect URLs that might be relevant. You’re going to need the design info you settled on in the last step now, when you finally build your store.

Whatever design you chose needs to be compatible with your ecommerce software, too.

There are literally hundreds of ecommerce shopping cart platforms. Choosing the right ecommerce software is not easy. You need to carefully evaluate things like loading speed, features, compatibility with different payment gateways, compatibility with your business structure, your web developer skills, SEO-friendly features, and more. I’m putting together reviews and comparisons to help you pick the right one.

Once you decide on your ecommerce solution, don’t hire a “CRO Expert” or expensive development company. Just use a theme. You might need to pay a small fee of $100 or so to get a good template, depending on the shopping cart you choose and what they offer.

If you don’t want to worry about taking credit card payments, you can sell products online on a marketplace like Amazon.

Love the idea of your own digital real estate? Make sure your ecommerce platform can scale with you and integrate with popular ecommerce marketplaces to increase your exposure.

Setting up your online store is much more than adding your products and content. You need to get your email marketing and automation set up as well.

This is important to set up BEFORE you get traffic. Email marketing is essential for driving conversions. Make sure you set up coupons, thank you emails, and upsells so you can turn visitors into shoppers. You also have to think about customer support.

Step 7: Attracting Customers to Your Ecommerce Store

Apologies to any Field of Dreams fans, but if you build it there’s no guarantee they’ll come. You need to market your store.

When you chose your cart, I told you to think about search engine friendly features. They are NOT all the same.

The keyword-stuffing days of the early 2000s are long gone, but SEO is alive and well. You need to keep keywords and search terms in mind on each page of your site, in your URLS, and in your ad campaigns. You also need to think about driving traffic to your site.

The best ecommerce sites invest heavily in online marketing. If you don’t have the funds, you better have the elbow grease. Subscribe to marketing newsletters or listen to digital marketing podcasts to keep a pulse on the digital marketing industry and get your fill of marketing tips.

Will you use sponsored content, social media, pay-per-click ads, or a combination of strategies? How will you monitor what campaigns are driving traffic to your store? If marketing your site seems overwhelming, will you hire help?

Your site isn’t the only thing you need to drive traffic to. The product(s) you choose also need to be included in your marketing budget.

Your mission is to sell products, not drive traffic. To sell products, you have to think beyond your site and look for expansion areas.

No matter what and how you decide to sell, the first step is to create an email list. Place an opt-in freebie on your website, launch a social media campaign to gain subscribers, or host a giveaway where the entry ‘fee’ is your customer’s email address.

Running a giveaway is my go-to marketing tactic to get traffic and subscribers quickly. Giveaways have the added benefit of increasing your brand presence and product visibility. Building an email list gives you a group of warm leads to work with, making the sales process much easier.

Providing consumers with coupons and content via email helps to keep your brand on their mind, boost sales, and establish credibility. Keep your emails interesting – ask for your customers’ input often, including reviews. Respond quickly to customer service and product quality issues, and work on building relationships. No sales interaction is about the first sale; focus on the next one always.

On your site, look at how and where traffic flows. Are your product pages targeted to your persona? Are you losing would-be customers in the same place? If you’re driving traffic to your store but nothing is selling, fix the leaks in your sales funnel by carefully optimizing each page and taking a close look at your product listings. Use analytics to help with this task. There are tools that can help you monitor and optimize every step of the sales process. Make use of them.

Look into partner and affiliate marketing to boost your brand presence by offering affiliate marketing options and partnering with retailers in your shoulder niches. If you’re nervous about approaching other retailers, look into options like JVZoo (www.jvzoo.com), ClickBank (www.clickbank.com), and Amazon Associates.

You can also offer bloggers in your niche a free sample of your product in exchange for reviews. If you’re selling products on Amazon, one easy way to gain consumer respect and confidence (and reviews) is to ask for feedback. Include a card with each product that asks for an honest review and provides contact information for your company (email is enough, unless you have a dedicated customer service phone line).

Ready To Start Your Online Business?

Did this post answer your questions about starting an ecommerce store? If so, please give it a share. I’ve spent years helping business owners like you. Running a successful ecommerce website doesn’t have to be a struggle or pricey.

If you’ve got the elbow grease and time, you could launch a profitable online store for a few hundred dollars per month.

Your success is important to me. If you take the time to read through the resources above, you’ll save hundreds of hours of work and you’ll know where you’re more likely to get your money’s worth in ecommerce. I really hope you enjoyed the insights Ive shared on starting an ecommerce business. If I missed anything you’d like to see covered, let me know in the comments.

Darren DeMatas

Darren has an MBA in Internet Marketing and 10+ years of experience marketing retail, manufacturing and Internet marketing corporations, 7-figure brands and startups online. Follow him on Twitter, LinkedIn. Or take his course to learn ecommerce.

65 thoughts on “How To Start an Ecommerce Business From Scratch”

As I believe, a fruitful eCommerce business must be exceptional, unique, and more productive than your competitors to succeed. Starting an eCommerce business is too easy if you can acquire the best resources but it’s really tough to go the level of top eCommerce industry competitors.

Great blog!!! I would just like to comment on the “Choose Your Ecommerce Niche” part, choosing the niche and the right ecommerce platform are probably the most important. If you choose a niche that is uber competitive you will not turn a profit very soon and if you don’t choose a good platform, you will have to figure things out on your own instead of relying on a proven system. That’s why you should choose best eCommerce platform for your business.

My $0.02 is, Shopify is the best out of the box platform to get set up and running with a legitimate ecommerce store. Even if you’re not tech savvy. But they also have good infrastructure to scale. They have an amazing partnership integration so you can get partners to help you execute tasks directly in their wheelhouse, i.e., advanced subscription options. We just attended Unite 2018 and got the skinny on some of their new features. Be pumped!

Hey Scott. Something I’ve been trying to understand is…if u have a shop on Shopify…. do you have to pay the postage for products purchased by clients, or is the postage included and paid by the client? Tnx.. would appreciate some light on this

WOW, I really enjoyed reading this and I appreciated how to the point and simple you made it to understand. I learned a lot and really appreciate all the references you added throughout the article for additional support, def looked through some of those while and even took notes. Thank you so much!

Im actually from the philippines,(a very poor country). Anyways,I read so many success stories about making money online. I’m so excited to the point I want to be them,to feel the financial freedom they’re having, but it’s almost a week now since I decided to try it,but sad to say until now I done nothing but to search and research. I’m actually afraid I cant do it,you know Im just an average guy,with an average job,and an average talent…What I know is I’m not a quitter,once i start it,i know I must not stop,theres no success in quitting right?…. Can I ask? What can be the first move I must do?Is it join a program and series of training?and if thats it,can you pls recommend me something where I learn it best?I know success is depending on my effort,what I need is a guaranteed program.Pls send me a reply darren, Im begging.

It depends on what business model you like. I think thats the first step – is to learn about the business models and the resources you need. If you dont have a product idea – or a physical product you want to sell – affiliate marketing is a good route.

Research Research Research. That is the first step for many people. I spent nearly a year researching and writing my business plan. It has paid off. I got an investor on my first try, and the best part is the upfront costs are going to be paid through a grant, so I do not even have to pay back the investment. We are currently finalizing the financials and exactly how and where the money is going to be spent. Yes, we went through 3 rounds of changes on the business plan before they accepted it, but the time spent researching has paid off. That is my little 2 cents. Good luck with your future business.

Hi Darren,
Just went through your article and it came at the right time. Especially for a startup choosing a single product prevents you from an overcrowded idea. I am about to start an e-commerce business and have been having problems on which products to start with. Thanks for the article

Hello, I want to start an ecommerce store selling homemade natural beauty products. I primarily want to just create the products from my home but an concerned with the legality of doing so. I figure it’s no different than selling crafts on Etsy, but I am also worried about the success of it. Could it be possible to do both dropshipping and a home-created product sales with ease?

I am wanting to start my own business but I don’t have a lot of money. I am really good at building wordpress website and I can code I went to school for it. But no idea what to do my business on. Could anyone help me with ideas or a way to start a ecommerce website for low money.

Hello Darren DeMatas,
I want to start a e commerce business but honestly I don’t know exactly where to start although on this site I’ve come around some very interesting articles which I believe would be very helpful.
I need some more presides guardians
Thanks Darren.

Hi Darren, your information is very useful and it applies to anyone who is curious about the online world, well done. My question is if I start my e-commerce site using a third party supplier like Wix and Go Daddy will I have full autonomy of the site which will enable me to scale up as I progress? I ask this question because I am not really sage at coding or using WordPress at all. Would you recommend learning WordPress to launch my site? Or do you think using a third party web builder is equally as beneficial

Thank you for this article. With all the information that’s available and easily accessible, things can get pretty overwhelming. Your article covers everything in one place , and you give off a very reliable and comfortable vibe. 🙂

I want to start a small ecommerce business using private label or white label, though leaning more toward private label since I like the idea of being part of the formula creation process. I’m interested in the skin care industry, particularly the anti aging category. I need help in the selection process of manufacturers, and web developers, Emarketing, etc. Are you available for consulting? It would make me feel a lot more comfortable to go through this process with someone with your expertise. You can imagine how intimidating this could be for someone who wants to start and no ecommerce or marketing experience. Please let me know. Thanks so much.

Hey Darren, thanks for this article, I really needed it to clear up some things. I do, however, need to ask for an advice. Living in Europe, I’ve been hearing a lot lately about every 1 in 5 (I guess) Americans quitting their jobs and starting their online shops by reselling products. What I wanted to do is start selling luxury clothes. Why this category? Simply because everyone likes wearing branded apparel and it can prove to be a lucrative business, in comparison to Ali Express and their cheap (quantity over quality) products.

I found this Swedish company called Brandsgateway.com for this purpose and wanted to register with them and start selling, but I don’t know which platform to use first. Which one would you recommend? They use WooCommerce, Shopify, and Prestashop. What do you think?

Hi Darren
Your article is very informative. I have an idea to start an ecommerce business in adult toys. I know that is a market that is flooded at the moment but i have a niche . My problem is how do i start? Advice please

Your site has been like hitting a gold mine for me! I want to start an e-commerce business but i have never figured out how to go about to to yield results,i always seem to reach a dead end. Bumping i to your site has opened my eyes and broadened my mind in so many way. I want to start up an e-commerce business but i have a variety of products in mind and i am not shre how to go about targeting the right audience and keeping the social media pages/websites interesting and engaging.i am also stuck on coming up with the right business name.

I have a variety of products in mind including and not limited to; kids clothing, men official shoes, bikes,clocks,breakfast in bed tray and other unique things but i seem to have reached a dead end and your insight will be really helpful.

I don’t think you can start any business without some capital. You need some money. You can bootstrap the content marketing side by creating content yourself. But you will need at least some money for hosting and software.

Hi Darren, would you recommend to start the eCommerce business by integrating the eCommerce platform with Accounting and SCM platforms? Or start only with an eCommerce platform like Shopify and then gradually integrate?
How does the infrastructure (set of platforms like eCommerce, Accounting, SCM, ERP etc)of an eCommerce business looks like in Year 1, 2 and 3?

None of this matters when you start. Questions like this paralyze people from starting. What you need is a good niche, a strong brand, and good marketing. If you cant get traction Accounting and ERP stuff doesnt matter.

I plan to create an e-commerce which works as a platform for market place. Were in I will be marketing products of small businesses that cannot afford to create a website. I will be targetting businesses that are related to food, grocery commodities. I don’t know how to start to materialize my plan. can you help me where to start? ( i have to consider the delivery option which I don’t know what to consider)

I am about to launch an ecommerce store under a domain name… It’s not a brandable domain name but it has good google keyword search in the domain name.

I refuse to get tax license before it makes money first. I don’t even have a wholesale license or anything. Once and if I recieve $1000 I will proceed to get all that stuff registered.

How do people get so many products to sell in their store? Do they reach out to each individual company? I finally received a whopping ONE business agree to wholesale to me under the domain lol. My question is…how are these ecommerce stores receiving all of these wholesale products? Can I just go to any brand store and expect them to wholesale to me?

Any advice on big commerce vs shopify for CBD? I know big commerce is more SEO friendly which is vital, but I will be dropshipping as well, and shopify is king for that. Being that I am not experienced in SEO I will be hiring help for my e commerce store anyways and should be fine with shopify, right?
Lastly, would it be smart to hire a copywriter for my sites sales copy and product descriptions? This is all so very new to me and I’m probably overlapping ideas or not understanding everything as of yet. Any advice would be greatly appreciated and I look forward to taking one of your courses when available.

I think, the most important thing about starting a new business is knowing your “why”. Why is the specific business necessary in the first place? Can it provide a valuable solution for an existing problem for the target market? Can it improve lives with real values? Can it help turning the world into a better place. Without a strong “why”, it’s hard to pick up success.

If a business is solely about making more money for the owners, it’s probably not worth starting in the first place. Most if not all the successful business have successfully provide value to their target market. Google, for example, is not created for solely making money, but have provided a very valuable solution in the form of a search engine. Facebook has a very strong “why” to help us connect with more people, and so on.

Starting a business can be very though with various pitfalls along the way, and a strong motivation—this “why” — can help us persevere. On the other hand, only when we can offer strong value can we grow our market sustainably.